Revenue Recognition

9 Months Ended

Sep. 30, 2021

Revenue Recognition [Abstract]

Revenue Recognition

Note 12 – Revenue Recognition

ASC Topic 606- Revenue from Contracts with Customers, does not apply to revenue associated with financial instruments, including revenue from loans and securities. ASC Topic 606 does apply to noninterest revenue streams, such as wealth management, including trust and brokerage services, service charges on deposit accounts, interchange fee income – debit card income, and gains/losses on OREO sales. Noninterest revenue streams that are within the scope of ASC Topic 606 are discussed below.

Wealth Management

Trust and asset management income is primarily comprised of fees earned from the management and administration of trusts and other customer assets. The Corporation’s performance obligation is generally satisfied over time and the resulting fees are recognized monthly, based upon the month-end market value of the assets under management and the applicable fee rate. Payment is generally received a few days after month end through a direct charge to customers’ accounts. Optional services such as real estate

sales and tax return preparation services are also available to existing trust and asset management customers. The Corporation’s performance obligation for these transactional-based services is generally satisfied, and related revenue recognized, at a point in time (i.e., as incurred). Payment is received shortly after services are rendered.

Service Charges on Deposit Accounts

Service charges on deposit accounts consist of account analysis fees (i.e., net fees earned on analyzed business and public checking accounts), monthly service fees, check orders, and other deposit account related fees. The Corporation’s performance obligation for account analysis fees and monthly service fees is generally satisfied, and the related revenue recognized, over the period in which the service is provided. Check orders and other deposit account related fees are largely transactional based, and therefore, the Corporation’s performance obligation is satisfied, and related revenue recognized, at a point in time. Payment for service charges on deposit accounts is primarily received immediately or in the following month through a direct charge to customers’ accounts.

Interchange Fees – Debit and Credit Card Income

Fees, exchange, and other service charges are primarily comprised of debit and credit card income, ATM fees, merchant services income, and other service charges. Debit and credit card income is primarily comprised of interchange fees earned whenever the Corporation’s debit cards are processed through card payment networks such as Visa. ATM fees are primarily generated when a Corporation cardholder uses a non-Corporation ATM or a non-Corporation cardholder uses a Corporation ATM. Merchant services income mainly represents fees charged to merchants to process their debit and credit card transactions, in addition to account management fees. Other service charges include revenue from processing wire transfers, bill pay service, cashier’s checks, and other services. The Corporation’s performance obligation for fees, exchange, and other service charges are largely satisfied, and related revenue recognized, when the services are rendered or upon completion. Payment is typically received immediately or in the following month.

The following presents noninterest income, segregated by revenue streams that are within and outside the scope of ASC Topic 606, for the nine and three month periods ended September 30, 2021 and September 30, 2020:

	Nine Months Ended				Three Months Ended
	September 30,				September 30,
(in thousands)	2021		2020		2021		2020
Noninterest income
In-scope of Topic 606:
Service charges on deposit accounts	$	1,292	$	1,439	$	475	$	447
Other service charges		664		517		232		195
Trust department		6,441		5,355		2,166		1,871
Debit card income		2,623		2,052		900		738
Brokerage commissions		854		713		229		234
Noninterest income (in-scope of Topic 606)		11,874		10,076		4,002		3,485
Noninterest income (out-of-scope of Topic 606)		1,712		1,335		521		493
Total Noninterest Income	$	13,586	$	11,411	$	4,523	$	3,978